Reports & Media

Media Release: New Zealand Initiative welcomes the Government’s plans to ramp up testing for Covid-19

Media Release

31 March, 2020

Wellington, 31 March - The New Zealand Initiative welcomes the Government’s plans to ramp up testing for Covid-19 beyond 3500 per day to get the country closer to reopening its economy.

Prime Minister Jacinda Ardern told a press briefing this afternoon the Government has completed approximately 21,000 tests for the coronavirus Covid-19 already and is on track to issue 3500 tests per day.

But Ardern said authorities weren't testing widely enough to accurately judge the location of community outbreaks and has expanded the case definition criteria to people without any known association to overseas travel.

The New Zealand Initiative chief economist Dr Eric Crampton said in the report Effective Treatment: Public policy prescription for a pandemic that robust testing, if deployed properly, would dramatically change virus transmission curves. And ubiquitous testing could radically reduce the need for nationwide lockdowns.

“Pandemics are, in large part, an information problem. Being able quickly to know who is infected and who is not means fewer people would need to be in self-isolation or in lockdown."

“If treatment and vaccines are further off, it becomes even more important to scale up testing,” Dr Crampton said in the report.

Ardern also clarified the Government’s decision on Easter trading hours. Shops will be shut on Good Friday but can be open on Easter Sunday.

Another recent report Short-time work to maintain employment by the New Zealand Initiative highlighted the importance of maintaining employee/employer relationships to help the country survive the emerging economic recession.

Author and research fellow Dr David Law said maintaining employment and the ability of firms to recover quickly when the crisis abates is important given that labour markets in several European countries are yet to fully recover from the Global Financial Crisis (GFC) of 2008.

The report said a policy called short-time work (STW) was credited with success in Germany during the GFC. This policy is now common among OECD countries and should be considered in New Zealand as a way of allowing certain firms to reduce costs above what is possible with current wage subsidies and better preserve employee-employer links.

“As the country heads into a severe recession, policymakers are rightly implementing myriad measures to support people and firms over the coming months,” Dr Law said.

The New Zealand Initiative has produced several new reports about Covid-19 and its impact on the economy.

Dr Eric Crampton and Dr David Law explore whether a Universal Basic Income (UBI) would help with the economic fallout from the crisis in Stay on Target.

ENDS

Our Chief Economist Eric Crampton and Executive Director Oliver Hartwich are available for comment on the Covid-19 crisis to deliver key insights from a national and international perspective. To schedule an interview, please contact: